Top Swing Trade Ideas for Thursday, June 5: DexCom, Conn's and More

NEW YORK (TheStreet) -- Good day, traders!

Today's top pick are DexCom (DXCM), Iamgold (IAG) and Conn's (CONN).

1. First, let's look at the medical device company, DexCom. It focuses on the design, development and commercialization of continuous glucose monitoring systems.

DexCom traded up 7.1% on Wednesday, closing at $34.88 per share.

  • Wednesday's range: $33.29 - $34.91
  • 52-week range: $19.93 - $49.83
  • Wednesday's volume: 1,108,091
  • 3 month average volume: 997,972

DexCom looks good technically because it formed one of the best candlestick signals. On Tuesday, the chart formed a doji, which indicates indecision amongst investors, the on Wednesday, price action gapped up. This combination is called a "doji gap up," and is known as a very bullish signal. A doji gap down is a very bearish signal.

Consider this: With a doji, there is a battle between the bulls and bears, and neither wins, and the doiji is formed. Then the following day, the stock gaps up and forms a big bullish candle. This shows that the bulls won the battle and share price will continue to rise in the direction of the gap. 

DexCom had a huge correction between March and May, and traded down 40%. For the last month shares have traded back up almost 18%, and yesterday's price action tapped the 50-day simple moving average, and the stock closed 1 penny below this average. Look for continued bullish trading today above the 50-day SMA and beyond. There is overhead resistance at $36.06, $38.73 and again at $41.96. I would target the 52-week high, but would be fine with a trade to the $41.96 level for 20% to the upside. I'd set my stop at $32.16 and stay long until there's a confirmed sell signal or a close below the t-line.

2. Next, let's look at Iamgold, which explores, develops and operates gold mines. The company also explores for silver, niobium and copper deposits.

IAG traded positively on Wednesday, closing up 1.5% at $3.46 per share.

  • Wednesday's range: $3.35 - $3.62
  • 52-week range: $3.00 - $7.08
  • Wednesday's volume: 20,312,420
  • 3 month average volume: 5,556,850

IAG is a rounded-bottom breakout chart pattern. I like this chart as it gapped up after a huge bullish day on Tuesday and Wednesday pulled back as investors took profits. This is an opportunity to get a better entry price, now that it's pulled back a bit, and still closed over the 50-day simple moving average. Look for an entry above the 50-day SMA and target the 200-day simple moving average for 20% to the upside. Set you stop at the t-line, which is at $3.25.

There is overhead resistance between the current price and the 200-day SMA, but nothing that compelling, so I would just stay long, let the trade work and let the trend work itself out. There is 20% upside potential, but don't be afraid to take your profits and run with 8%, 9%, 10%. That would still be a great trade. Stay long until you see a confirmed sell signal or a close below the t-line.

3. Now, let's look at Conn's. It operates as a specialty retailer of durable consumer goods and related services in Texas, Arizona, Louisiana, Oklahoma and New Mexico.

CONN traded lower on Wednesday, closing down 1.7% at $47.48 per share.

  • Wednesday's range: $47.11 - $48.90
  • 52-week range: $31.17 - $80.34
  • Wednesday's volume: 759,476
  • 3 month average volume: 1,248,210

CONN was a rounded-bottom breakout on April 15, then traded up and back, testing the patten, and was again a rounded-bottom breakout on May 22. I didn't want to recommend this trade before because earnings were approaching, and I never suggest holding over earnings. Now that positive earnings have been reported and there is a slight pullback, it's a perfect time for an entry. 

Shares are still trying to fill the gap down that occurred February 20, a big gap down, so there was a lot of resistance to the upside. Now the gap down is almost closed, and the resistance is somewhat less relevant. I'd set my stop at the 20-day simple moving average at $43.94. Like with all rounded bottom breakouts, target the 200-day simple moving average first, which is almost 15% to the upside from yesterday's close. Not to say that the bullish move will stop at the 200, but I'd take some profits there. Stay long until you see a confirmed sell signal, or a close below the t-line.

Good luck traders!

Learn how to trade candlesticks here, this is my trading home.

At the time of publication, the author held no positions in any of the stocks mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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